The Diego Rivera Court at the Detroit Institute of Arts: The iconic murals were not included in the valuation by Artvest because they could not be removed without significant damage being done to them.

A new appraisal of the Detroit Institute of Arts collection, including art not owned by the city, pegs the value at as much as $4.6 billion but estimates the top amount the artwork could bring in at just $1.1 billion to $1.8 billion.

And that’s only if litigation or the threat of it doesn’t prevent art from being sold to begin with.

Through their attorneys, the DIA and city of Detroit commissioned New York-based Artvest Partners in the spring to do the full valuation of the museum’s collection.

Attorneys felt the full valuation would help move the bankruptcy proceedings forward, particularly during the hearings scheduled for Aug. 14, said DIA COO AnnMarie Erickson.

The report, which follows an earlier valuation by Christie’s Appraisals Inc. of only DIA art purchased with city funds, said any number of factors could affect the potential sale price for art. Those range from a glut of art works in the market to the issue of whether there is clear title, Erickson said.

“You can’t sell a work of art without holding clear title to it. If anyone is disputing your right to sell that art, it would end up in court,” Erickson said.

“The report clearly outlines there will be massive litigation should a forced sale be ordered.”

According to the report, an auction house will not accept an item for sale unless the seller can convey free and clear title. “Property with the prospect of pending or future litigation clouding title will not be acceptable for sale until such issues are cleared in the courts,” Artvest said in the report.

And the threat of litigation is real, given that Michigan Attorney General Bill Schuette has weighed in to say the art is held in trust and cannot be sold, and heirs of former donors as well as current ones would be likely to litigate to prevent a forced sale, Artvest said.

The DIA itself would also litigate a forced sale, Erickson said.

“We’ll do whatever we need to do to protect the collection,” she said.

The report cites Brandeis University’s proposed sale of artwork at its Rose Museum in Massachusetts several years ago, an idea that spurred protests, litigation and the departure of the university’s president. None of the art was sold.

“Rose Museum isn’t entirely analogous, but it does speak to people coming in and protesting the sale of art and litigating it and prevailing in the end. They did not sell the collection,” Erickson said.

More recently, the Delaware Art Museum in March decided to sell up to four pieces of its collection to repay $19.8 million in bond debt. One, “Isabella and the Pot of Basil” by William Holman Hunt (1827–1910), which had a low sales estimate of nearly $8.5 million, instead sold for $4.3 million in mid-June, according to the report.

“There’s a certain feeling in the art world that buying works that were owned by a museum is not the thing to do, particularly those that are being sold outside of accepted museum practice.”

DIA Director Graham Beal has told Crain’s that it’s acceptable for museums to sell artwork only with the intent of improving their collections.

The Artvest report exempted or discounted some works of art from the valuation, most notably the iconic Diego Rivera murals.

“While these are incredibly rare, historic and significant works of art, they are frescos applied directly to the walls, so they cannot be removed without cutting them off the wall and inflicting serious damage, and incurring significant cost,” the report said.

“Additionally as they were recently designated a National Historic Landmark in April of this year, it is hard to imagine how such removal could done without serious backlash.”

The report also assigned little to no value to some Modigliani paintings because of provenance issues, to some Old Masters paintings that might be reattributed to other artists and other works of art that have no comparable art sales to benchmark against within the last 70 to 100 years.

How does the DIA believe the report could impact the grand bargain?

“I hope the pensioners who have not yet voted will look at this report and understand with the grand bargain they have more than $816 million dedicated solely to them,” Erickson said.

If they role the dice and go through years of litigation, they may end up with about the same amount or a little more and they’ll have to split it with creditors, she said.

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